The House of Representatives voted 220-175 to overhaul patent rules and place a ban on tax-planning method patents.
H.R. 1908, the Patent Reform Act of 2007, mainly contained provisions that would make it harder for companies to be sued for patent infringement. Technology companies had heavily lobbied for the changes to reduce their vulnerability to lawsuits from competitors.
However, the act also contained a provision that would protect accounting firms from lawsuits over tax-planning methods. The bill defines "tax-planning method" as a plan, strategy, technique or scheme designed to reduce, minimize or defer a taxpayer's tax liability. However, the bill did not include the use of tax preparation software or other tools used "to perform or model mathematical calculations or prepare tax or information returns."
In the House Judiciary Committee report on the bill, Congress noted that if tax strategy patents were allowed to proliferate, there could be a corresponding reduction in tax revenues. "Granting a government monopoly in the form of a patent that undermines another key federal function -- the collection of revenue -- seems peculiar, if not contradictory, and raises fundamental questions about the appropriateness of such patents." The committee also noted that both taxpayers and tax advisors could face patent infringement suits for using patented tax strategies.
The American Institute of CPAs hailed the passage of the act. "Our underlying concern with tax strategy patents is that they violate the core principle of equity that is the foundation of our voluntary tax system," said AICPA CEO Barry Melancon in a statement. He noted that 60 tax strategy patents had already been granted and 99 more were pending.
In other AICPA news, the institute has named Mat Young as its director of congressional and political affairs, a newly created position. Young has previously worked as director of economic policy for Sen. Debbie Stabenow, D-Mich., as well as for the Democratic staff on the House Banking Committee and the Office of Federal Housing Oversight.
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access